Are Medicare plans complying with CMS regulation?

Objectives: The US Centers for Medicare and Medicaid Services (CMS) have put forth guidance recommending coverage of 75% of the costs of 'all or substantially all' drugs in six therapeutic categories deemed medically necessary for Medicare beneficiaries: anticonvulsants, antidepressants, antineoplastics, antipsychotics, HIV/AIDS and immunosuppressants. For 2007 filings, we analyzed compliance by 36 leading prescription drug plans with the CMS guidance.

Methods: Using databases at the Tufts Center for the Study of Drug Development, we identified 201 drugs approved by the US FDA between 1962 and 2007 in the six therapeutic categories mentioned above. For these drugs, we gathered data from 36 prescription drug plans on prices, formulary placement, cost-sharing and conditions of reimbursement. Our primary source for formulary data was the Formulary Finder on the CMS website.

Results: Plans are not complying with the 'all or substantially all' guidance. Across all six categories, an average of 17% of drugs are not covered, with a higher percentage of exclusions among antineoplastics and immunosuppressants. In addition, 18% of covered drugs have one or more conditions of reimbursement, with prior authorization leading the way at 15%, even in categories in which the use of prior authorization is not sanctioned (e.g., HIV/AIDS).

Conclusions: Noncompliance with CMS guidance suggests CMS oversight may be lacking. Further research must be performed to determine whether, on balance, formulary exclusions and restrictions in these categories are harmful to patient outcomes.